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The Functions of the Executive, his landmark book on managers and organizations, Chester Barnard wrote: "It seems to me inevitable that the struggle to maintain cooperation among men should as surely destroy some men morally as battle destroys some physically."(1) This is a grim observation. It flies in the face of our widespread celebration of business leadership, entrepreneurial achievement, and the triumphal march of capitalism into Asia and now Eastern Europe. Barnard's view also seem unrealistic. Management life is surely not, after all, a series of anguishing moral dilemmas. And when ethical issues do arise, the right answer, morally and legally, is often clear. The typical challenge is finding practical ways to do the right thing, not discerning what is right. The investment bankers who met in dark garages to exchange inside information for suitcases of cash were not struggling on the horn of moral dilemmas but were breaking the law and violating their clients' trust.
Yet in other cases, the central challenge is deciding what is right. In 1988, for example, the executives of Roussel UCLAF, a French pharmaceutical company, had to decide whether to market a new drug called RU 486. Early tests had shown that the drug was 90 to 95% effective in causing a miscarriage during the first five weeks of a pregnancy. A scientific and medical breakthrough, RU 486 was an alternative to surgical abortions, and its creators believed it could ultimately help hundreds of thousands of women avoid injury and death from botched abortions. As researchers and business managers, many Roussel UCLAF executives had been personally committed to developing RU 486. They faced the question, however, of whether to introduce the drug and how to do so. Protests against Roussel and debates within the company were already diverting a great deal of management time and sapping employee morale. Some of the countries that faced severe population problems and wanted access to RU 486--such as China--did not have the medical infrastructure to use the drug safely. Anti-abortion groups were threatening an international boycott of the products made by Roussel UCLAF and Hoechst, the German chemical giant that was Roussel UCLAF's largest shareholder. Indeed, the costs of the boycott seemed likely to outstrip the profits from selling RU 486. Moreover, Hoechst's...